Resolving Conflicts

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Roman Sheremeta, Ph.D.

Professor, Weatherhead School of Management

Case Western Reserve University

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Part 1: Conflict as a Collective Action Problem

Part 2: Mechanisms of Conflict Resolution

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Part 1: �Conflict as a Collective Action Problem

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Collective action problem�

• A collective action problem (or social dilemma) is a scenario in which there is conflict between the individual interest and the group interest.
• Each individual in the group faces a choice to either act selfishly or cooperate. In a collective action problem it is always in the individual’s best interest to act selfishly, regardless of what the other individuals do. However, if all individuals act selfishly, then they all get worse outcomes than if they all cooperate.

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• Some examples:
• Conflicts between individuals: individual wants to win a conflict, resulting in escalation, but both are better off without escalation.
• Intergroup conflicts: similar to individual conflicts, but over expenditure of resources in team conflicts can be even more severe because of intragroup cooperation.

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Escalation of conflict�

• “Friends”:
• Rachel vs Monica
• https://www.youtube.com/watch?v=TUVXVM4CJIM&t=32s

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Theoretical model�

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Theoretical model�

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Conflict game�

• Experiments #8:
• Conflict game

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Conflict game�

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Explaining competitive behavior�

• Why are people so competitive? Sheremeta (2020) provides a number of explanations:
• Joy of winning: In addition to the prize, people value winning in itself (e-Bay in 2003)
• Inequity aversion and spite: people don’t like when somebody else receives higher payoff.
• Mistakes: People make mistakes which lead to over expenditure of resources.
• Systematic biases: loss aversion.
• Impulsivity: acting intuitively, not deliberatively.

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Impulsivity�

• The CRT was designed to assess individuals' ability to suppress an intuitive and spontaneous (“System 1") wrong answer in favor of a reflective and deliberative (“System 2") right answer:
• A bat and a ball cost $1.10 in total. The bat costs $1.00 more than the ball. How much does the ball cost?
• If it takes 5 machines 5 minutes to make 5 widgets, how long would it take 100 machines to make 100 widgets?
• In a lake, there is a patch of lily pads. Every day, the patch doubles in size. If it takes 48 days for the patch to cover the entire lake, how long would it take for the patch to cover half of the lake?

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Part 2: �Mechanisms of Conflict Resolution

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Conflict avoidance�

• Mechanisms of conflict avoidance are:
• Signaling (both cheap and costly).
• Threats (Tingley and Walter 2012).
• Side-payments (Kimbrough and Sheremeta 2011).
• Assigning clear property rights (Kimbrough and Sheremeta 2014).
• Adherence to authority (oracle) (Kimbrough et al. 2011).
• Deterrence via armament (Smith et al. 2011).
• Shadow of the future: making future more immanent.
• Equality: “Justice originates among those who are approximately equally powerful (. . .) where there is no clearly recognizable predominance and a fight would mean inconclusive mutual damage (. . .)” (Friedrich Nietzsche)
• Etc.

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Conflict de-escalation�

• Mechanisms of conflict de-escalation:
• Possibility of retaliation (Lacomba et al. 2010).
• Repeated interactions with fixed matching (Lugovskyy et al. 2010).
• Communication (Cason et al. 2011).
• Simultaneous participation in a cooperative game (Savikhin and Sheremeta 2011).
• Revealed identities (Mago et al. 2012).
• Using tit-for-tat strategies (Axelrod 1984).
• GRIT model of conflict resolution.
• Etc.

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References�

• Sheremeta, R. M. (2018). Behavior in group contests: A review of experimental research. Journal of Economic Surveys, 32(3), 683-704.
• Sheremeta, R.M. (2020). Impulsive behavior in competition: Testing theories of overbidding in rent-seeking contests. Working Paper.

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